LONDON (Bloomberg) — Vodafone Group Plc, the world's largest mobile-phone company, plans to cut hundreds of jobs in the UK to reduce costs and protect earnings amid the economic slowdown, two people with direct knowledge of the plan said.

The company aims to announce the measures today, said the people, who declined to be identified because the plans are confidential. The jobs will be eliminated at Vodafone's UK operations, the people said, declining to give a precise number.

Vodafone chief executive officer Vittorio Colao, the 47-year-old former McKinsey & Co. partner who took over in July, is pushing managers to eke out more profit from existing operations. Earlier this month, he agreed to merge an Australian unit with Hutchison Telecommunications Ltd.'s operation in that country, where growth prospects are slim.

"Companies, even if their business models are broadly speaking robust, are taking the opportunity to trim their cost basis," Jeremy Batstone-Carr, an equity strategist at Charles Stanley & Co., said in an interview with Bloomberg TV yesterday when asked why Vodafone is cutting costs. "It's good business practice to make sure that your cost base is appropriate for operating conditions."

Vodafone shares were little changed at 126.2 pence in London trading. The shares have declined 22 percent in the past year, cutting the company's market value to £66.2 billion.

On February 3, Colao said Vodafone was making progress on its plan to reduce costs by £1 billion ($1.45 billion) by March 2011 to protect earnings. The measures will have "some impact on headcount", he said at the time, declining to say how many jobs may be affected. The cuts would include "network rationalisation" and lower spending in areas such as logistics and advertising, he said.

The company may say today that besides the job cuts, it will also hire new people to bolster online and new media units, said the people familiar with the plans. The measures will lead to an overall net loss of "hundreds of jobs" in the UK

Simon Gordon, a Vodafone spokesman, declined to comment. Vodafone on November 11 cut its full-year sales forecast for the second time in four months, while keeping its profit forecast, raising the full-year free cash flow prediction and increasing the dividend payment.

"Telecommunication companies represent a nice place to be in these market conditions, largely because of the reliability of the dividend payouts," Charles Stanley's Batstone-Carr said.

Vodafone's UK unit had a margin on earnings before interest, taxes, depreciation and amortization of 23.2 percent in the six months ended September 30. In Germany, Vodafone's biggest market, the margin was 44 percent and in Italy 44.9 percent.